The U.S. District Court for the District of New Jersey has certified a class-action lawsuit against Global Tel*Link (GTL), one of the nation’s largest prison telecom companies. According to the court, the plaintiffs – including prisoners and their family members – alleged violations of the New Jersey Consumer Fraud Act, the Federal Communications Act, the Takings Clause of the Fifth Amendment and the New Jersey Public Utilities statute, as well as unjust enrichment.

The district court noted that in 2005, the New Jersey Department of Corrections (DOC) sought bidders to provide Inmate Calling Services (ICS) at all state prisons. AT&T won the bid and assigned the contract to GTL.

Under the agreement, GTL was to pay the DOC “site commissions,” defined as “a straight percentage of all originating billable revenue.” Those fees, the court said, led to “higher calling rates, and incentivized GTL to impose higher ancillary fees to make up for revenue paid out in commissions.” According to the complaint, that resulted in inflated phone rates as well as the imposition of “deposit fees,” whereby prisoners’ family members had to pay fees to add money to accounts to accept phone calls.

The plaintiffs argued that this “‘revenue sharing’ configuration resulted in calling rates and fees that were far in excess of the actual cost of providing ICS,” the district court wrote. “They claim, for example, that GTL was charging as much as $1.00 per minute for calling time that GTL purchased from telecom providers for as little as $.00018 per minute.... Because GTL’s contracts with the DOC and counties were exclusive, Plaintiffs – unlike normal telephone users – could not choose among different providers, and generally paid amounts far in excess of industry standards.”

The plaintiffs claimed that what emerged was a state-sanctioned, unregulated monopoly that generated substantial revenue for the DOC and GTL through excessive charges and fees imposed on prisoners and their families.

In its August 6, 2018 order, the district court found the plaintiffs had satisfied the requirements for class-action certification as set forth in Fed.R.Civ.P. 23(a), including 1) numerosity; 2) commonality of questions of law and fact common to the class; 3) typicality, to determine whether the claims of the representative parties are typical of the rest of the class; and 4) qualifications of the class representatives and counsel to “fairly and adequately protect the interests of the class.”

In a separate order the court denied the parties’ cross-motions for summary judgment, finding that “issues of material fact remain regarding the costs of providing ICS throughout the class period.”